Present Value of Perpetuity.  What is the present value of a $600 perpetuity if the interest rate is 5%?  If the interest rates doubled to 10%, what would its present value be?

Q: 1- If you invested $10,000 in an investment account and you expect it to double in 4 years, what…

A: 1. Investment= $10000 time= 4 years

Q: What's the future value of a 5%, 5-year ordinary annuity that pays $800 each year? If this was an…

A: The future value of an ordinary annuity and an annuity due are two important financial concepts used…

Q: What's the future value of a 3%, 5-year ordinary annuity that pays $300 each year? If this was an…

A: Interest Rate = r = 3%Time = t = 5 YearsAnnuity = a = $300

Q: How much would you pay today for a perpetuity of $ 1,000 per year if the prevailing interest rate is…

A: Perpetuity  is a type of security where, you pay money for an infinite amount of time. It keeps on…

Q: Given a 10 percent discount rate, what is the present value of a perpetuity of 51,000 per year if…

A: perpetuity is a security that pays for an endless measure of time. In money, interminability is a…

Q: What is the future value of a 3-year, $100 ordinary annuity if the annual interest rate is 10%?

A: The future value is the amount that will be received at the end of a certain period. In simple…

Q: What is the value today of $1,200 per year, at a discount rate of 6 percent, if the first payment is…

A: compound interest method:   in compound interest, interest on interest added so it's yield the good…

Q: 4. The present value of a growing perpetuity, with cash flow C1 occurring one year from now, is…

A: 4. True.  5. True.

Q: How much more is a perpetuity of $ 1000 worth than an anuity of the same amount for 25 years? Assume…

A: Information Provided: Perpetuity amount = $1000 Cash flow for 25 years = $1000 Interest rate = 15%…

Q: What is the future value of an $800 annuity payment over 10 years if the interest rates are 6…

A: Future value is the value of an asset in the future. It is based on an assumed rate of growth. It is…

Q: If the future value of an ordinary, 7-year annuity is $9,900 and interest rates are 9.0 percent,…

A: Given, Future Value = $9,900 Interest Rate = 9.0% Term = 7 years Formula: Future value of annuity…

Q: Suppose you are going to receive $13,000 per year for 7 years. The appropriate interest rate is 8…

A: Present value of annuity is the present value of all the stream of cash flows that occur in future.…

Q: What is the present value of the annuity?

A: We can determine the PV using PV of annuity due formula as below:In the formula below:PMT = annual…

Q: What's the future value of a 7 percent,  5-year ordinary annuity that pays $300 each year?

A: A theory that helps to compute the present or future value of the cash flows is term as the TVM…

Present Value

Present value (PV) is defined as the current or present value of all future sums of cash flow or money at a specified rate of return. This rate of return is known as the discounted rate, which is essentially the interest rate, discounted over some time. The expected cash flows are discounted at a discount rate to compute the present value. The higher the discount rate, the higher the future value (FV), but the lower the present value.